George Osborne is under pressure to do more to jump start the ailing economy after another set of negative growth figures put the UK on course for an unprecedented triple-dip recession.

The Chancellor George Osborne vowed not to "run away" from Britain's economic woes after the first official estimate suggested the economy shrank by an even-worse-than-expected 0.3% in the final quarter of 2012.

But the dismal picture swelled the chorus of voices on all sides demanding Mr Osborne use his Budget in March to slow his austerity drive in bid to inject life into the sluggish recovery. Office for National Statistics (ONS) calculations showed the economy flatlined in 2012 as a whole and experts predicted it would not regain its peak level for another two years.

London mayor Boris Johnson urged his Tory colleague to "junk talk of austerity" and press ahead with major infrastructure projects to revive the economy, saying confidence was crucial. Among senior financiers speaking out was Jim O'Neill, chairman of Goldman Sachs Asset Management, who said the GDP reverse showed fiscal policy had been "tightened too much" by the Chancellor.

The added voices come days after the International Monetary Fund slashed the UK's growth outlook to 1% in 2013 and its chief economist Olivier Blanchard suggested spending cuts should now be slowed. The Government is also braced for the loss of Britain's coveted AAA credit rating with all three major ratings agencies putting the country on negative outlook.

Deputy Prime Minister Nick Clegg appeared to admit the coalition had cut spending too deeply when it took power, saying there should have been more investment in infrastructure to support growth. He conceded there was "some way to go before the recovery really takes root".

Shadow chancellor Ed Balls accused Mr Osborne of being "asleep at the wheel" and said now was the time for a "plan B" to promote growth through VAT cuts and spending on infrastructure.

He said: "The longer David Cameron and George Osborne cling on to their failing plan the more long-term damage will be done. They must finally listen and act to kick start this economy."

Mr Osborne, the London mayor and Prime Minister David Cameron faced fire from some quarters after being pictured eating out in a Davos restaurant on the eve of the release of the ONS figures.

Greenpeace press officer Ben Stewart, who was also dining at the Alte Post pizza restaurant, said the PM and Chancellor were "laughing uproariously" despite by then knowing about the GDP slump.